Disclosure: This post may contain affiliate links, which means we may receive a commission if you click a link and purchase something that we have recommended. While clicking these links won't cost you anything, they will help us keep this site running and free for everyone.
Planning a trip to Madeira and wondering where to stay? Choosing the best location to base yourself can be tough, with so many diverse areas to choose from. Do you want to be surrounded by nature, close to the beach or in the lively city?
Having visited Madeira twice and experiencing different locations, I'm here to help you choose the best place to stay. In this guide, I’ve grouped the best areas based on what they offer, and top hotel recommendations for every budget.
Chloe Butcher
Overview of Madeira Areas
Madeira is a relatively small island that you can drive across in just over an hour. It's small size and well-maintained roads make it easy explore the island no matter where you base yourself.
So even if you choose to stay in one location, you’ll still be able to experience everything Madeira has to offer without too much travel time.
Best for a Lively Atmosphere – Funchal
Funchal, Madeira’s capital, is the best place to stay for a lively atmosphere, nightlife and entertainment. If you enjoy being in the centre of the action with easy access to restaurants, bars, shops and local markets, choose Funchal.
You can wander through the Old Town (Zona Velha), visit the Monte Palace Tropical Garden, take the famous toboggan ride down and do so much more.
Accommodation types in Funchal mainly consist of hotels, apartments and resorts on the waterfront.
- Royal Savoy – Ocean Resort (Luxury) – A stunning oceanfront resort with elegant rooms, infinity pools and top-tier amenities.
- Barceló Funchal Oldtown (Mid-range) – A stylish and modern hotel in the heart of the Old Town, perfect for exploring the city.
- 29 Madeira Hostel (Budget) – A comfortable and affordable stay in a central location.
Chloe Butcher
Best for a Relaxing Beach Escape - Calheta, Ponta do Sol, Lido & São Martinho
Madeira’s coastal areas of Calheta, Ponta do Sol, Lido and São Martinho are perfect if you're after a relaxing beach holiday while still providing easy access to restaurants, shops and activities.
Unlike other parts of Madeira where the coastline is rugged, these areas have some of the island’s rare sandy beaches and oceanfront promenades.
The accommodation types in these coastal areas mainly consist of hotels, cottages, apartments and a few big resorts. We've stayed in both Calheta and the São Martinho area.
Calheta is a great base if you enjoy the peace and quiet, but it's much less convenient for eating out, which didn't matter for us as we cooked at our apartment! Whereas São Martinho was perfect as it was quiet and by the ocean, but still walking distance to the town!
Calheta
Calheta is home to one of Madeira’s only golden sand beaches, created with imported sand from Morocco. It's a great spot for swimming and sunbathing, and the area has a peaceful, resort-like feel but still has plenty of dining options.
- Savoy Saccharum Resort & Spa (Luxury) – A modern resort with ocean views, infinity pools and a world-class spa in Calheta.
- Meu Quintal Apartaments 2, Calheta Madeira (Budget) - Cosy apartment in Calheta - very similar to the one we stayed in!
Ponta do Sol
Ponta do Sol is known as the sunniest spot on the island, it's a small town with a peaceful waterfront, colourful buildings and stunning sunset views. It’s a great place to unwind while still being close to hiking trails, nature and restaurants.
- Enotel Sunset Bay (Mid Range) - A modern hotel located right by the waterfront with stunning sunset views.
- SantoSerenus (Budget) – A comfortable and affordable apartment on the hillside.
Lido and São Martinho Area
If you'd prefer to stay closer to Funchal but still want a coastal setting, the Lido and São Martinho areas are great options. These neighboring districts are known for their long seaside promenades, ocean pools and a great selection of restaurants and bars.
Staying here gives you the best of both worlds, relaxation by the ocean and easy access to Funchal’s city centre.
- Baía I by An Island Apart (Luxury / Mid-Range) - The luxurious apartment we stayed in, perfect for families or groups!
- Hotel Alto Lido (Mid-range) – A stylish hotel with a rooftop pool, spa facilities and easy access to the Lido promenade.
Best for Access to Nature – Porto Moniz, Santana & Seixal
If you’re looking to slow down, immerse yourself in local life and be surrounded by stunning natural scenery, choose a traditional village or small town like Porto Moniz, Santana and Seixal, all located on the islands north coast.
Accommodation types in these northern towns and villages mainly consist of authentic cottages, guesthouses and a few apartments; you won't find big resorts or hotels.
Porto Moniz
On the northwest coast is Porto Moniz, famous for its natural volcanic lava pools. It’s a great base for nature lovers, especially if you’re planning to hike or explore the nearby Laurissilva forest. The town is quiet and serene, ideal for those who want to disconnect and enjoy the wild beauty of Madeira’s coastline.
- Aqua Natura Bay (Luxury) – A beautiful hotel with sea-view balconies located right next to the beach.
- Mountain Retreat By Madeira Sun Travel (Mid-range) – A cosy cottage in the mountains of Porto Moniz.
Santana
Best known for its traditional thatched A-frame houses, Santana is a great area to stay if you want to combine cultural experiences with proximity to hiking trails, including routes in the nearby Queimadas Forest Park and Pico Ruivo.
- Hotel Quinta do Furão (Luxury) – A clifftop hotel surrounded by vineyards with incredible coastal views - (one of our favourite viewpoints is here!)
- Sleep and Go in Santana in Nature B&B (Budget) - A peaceful and affordable countryside retreat with beautiful views.
All the best spots in one place?
Unlock exclusive access to our favourite hikes, hidden gems, photo spots & more with our interactive digital map & travel guide.
Seixal
Seixal is a small coastal village near Porto Moniz and one of Madeira’s hidden gems, with a black sand beach and dramatic cliffs. It’s perfect if you want an off-the-beaten-path location surrounded by nature.
- Casas do Lanço by An Island Apart (Luxury) – A secluded villa surrounded by nature with modern amenities.
Best for Hiking – Sao Vicente, Curral das Freiras & Encumeada
For dramatic mountain landscapes, quiet rural life and some of the island’s most breathtaking hiking trails, areas like Sao Vicente, Curral das Freiras and Encumeada are unbeatable choices. These areas are tucked away in the mountains of Madeira, offering a remote experience, far from the busy coastal towns.
São Vicente
São Vicente is a picturesque village on Madeira’s rugged north coast, surrounded by dramatic cliffs, lush green hills and volcanic caves. It’s quieter than the south but full of character, making it a great base for exploring the island’s nature without the crowds.
- Chalé na montanha (Mid-range) - A stylish and modern chalet tucked away in the mountains of Sao Vicente.
Curral das Freiras
Often nicknamed "Valley of the Nuns," Curral das Freiras is one of Madeira’s most unique destinations. Surrounded by towering peaks, this hidden valley feels worlds away from the city. It’s a peaceful spot with a strong sense of tradition and authenticity.
- Dazkarizeh73 Mountain Accommodation (Budget) – A friendly and affordable guesthouse with traditional décor and homemade food.
Encumeada
Encumeada is a small mountain pass settlement at the crossroads of some of Madeira’s most epic trails. With easy access to levadas, ridgeline treks and incredible views across both sides of the island, it's ideal for hikers and those who love nature.
- Valley View Hotel Encumeada (Mid-range) – A peaceful mountain retreat with rustic-modern interiors and unbelievable views.
Chloe Butcher
Our Thoughts
Personally, I’d recommend basing yourself in one of the coastal areas or around Funchal. These spots offer the perfect balance of peaceful and scenic, yet still close to restaurants, cafés and all the amenities you might need.
As I mentioned earlier, Madeira is a small island, so you can easily explore its dramatic nature and hiking trails no matter where you stay. We travelled all over, from sunrise hikes in the mountains to day trips along the rugged north coast, but always loved returning to our Funchal or coastal base for a relaxed evening and a good meal.
Rory Watson
Rory Watson
